Suddenly money seems to be flowing from the Internet and into new creative projects, small businesses and charitable causes. How do you get your hands on some?
There’s good news for crowdfunding newbies: your money is out there waiting. More people are willing to invest in new creative projects and causes than ever before.
Access to artists, charities and entrepreneurs has never been easier thanks to the crowdfunding movement. But, for every crowdfunding campaign that received funding on Kickstarter there are many others that failed.
How can ordinary people and small business owners make sure they get the money they need to create their ground-breaking project?
Using the strategies that worked on successful projects (and common pitfalls to be avoided) we put together this guide on crowdfunding to make sure you have success the first time around.
1. Start a Project that Matters
Deciding on a meaningful project or goal is the most important part of the entire crowdfunding process. It’s also the hardest.
In almost every crowdfunding campaign, success or failure is determined at the very beginning. A crowdfunding project will require the help of many others to raise hundreds or thousands of dollars. In order to convince friends, family members and complete strangers to give up their hard-earned cash it’s essential to start a project that others will be willing to support.
Not every campaign that’s been successful has set out with the goal of changing the world. Nor does it need to be innovative or unconventional. But it must have meaning to both the creator and the donor.
Why does your project matter?
Questions to ask yourself when starting a crowdfunding campaign:
- What you are trying to accomplish?
- Why should others care about it?
- How can you accomplish more with a donors help?
- How can a donors help make the world a better place if they get involved?
2. Craft Your Pitch
If you spent the time developing a project that matters to a large group of people, crafting your pitch should be easy. But it’s still not simple. The most successful crowdfunding projects spend countless hours crafting and testing their pitch over the life of the campaign. Even before launching it is important to get feedback on the project and pitch. All the lessons learned beforehand will help increase the likelihood of success. In addition, you may uncover weaknesses and pressing questions that will arise down the road.
An entire series could be created about crafting the perfect pitch but for now here are the most important questions to answer:
- Who are you?
- What is your project?
- Why should a donor trust you?
- Why should donors support your project?
- How much funding do you need to complete the project?
- How will you use the money?
- How long will it take to complete the project?
- After reading your pitch will donors be able to explain your project to their friends easily?
Now that you have covered the basics about what your project is and why people should care, it’s time to take it to the next level. With thousands of crowdfunding projects competing for your donor’s attention, it’s your job to make it simple for them to say “yes”. Unfortunately, many donors may make their final decision in only a matter of seconds. Within this time you will need to use all of your tools to convince them to support your project.
Here are additional ways to make your pitch standout:
- Use Attention-Grabbing Headlines
- Include Illustrative Images
- Answer Frequently Asked Questions
3. Determine Your Funding Goal
In the world of crowdfunding there’s no standard when it comes to project amounts, but there are a few guidelines to follow. Each project will vary in scope, cost and objectives.
Raising over $10 million for a breakthrough product is not unheard of and will become more common as the crowdfunding model grows in popularity. But projects like this are exceptions to the norm.
The key to reaching your funding goals is to provide incredible value to your potential donors. The more value you offer the more donations you will receive. It’s that simple. When setting your funding goals it is important to determine the minimum amount it will take to create your project. After the baseline is set, estimate how much it will cost to deliver on each of the rewards that are offered. If it costs more to deliver on the promised rewards than the total amount of money raised then you’re in trouble.
It is also important to consider your target audience. Many people are eager to donate a little to support a project they care about. Even if it’s only $5, $10 or $20. Give your donors this opportunity but make sure they get a meaningful reward for this contribution.
Others will want to support your project in a bigger way. A donation of a hundred or even a few thousand should offer the largest value to your supporters. Understanding your audience will help determine the right amounts and rewards to encourage the highest level of engagement.
4. Set a Project Time Frame
Setting the correct project time frame is essential to creating a sense of urgency for donors to get involved. The limited time offer is a marketers greatest weapon.
For first-time project creators it is important to set a time frame that will allow for changes in the marketing plan and enough time to reach a substantial number of people. The most common time frame for successful crowdfunding projects is 30 days.
But in order to make the most of this 30 day window, project creators need to already have momentum even before the campaign starts. In fact, getting a head-start is essential to your success.
5. Create a Promotional Video
An engaging project video is the key to your success. No if’s, and’s or but’s about it.
The promotional video needs to include the most important elements of your pitch. It should engage your donors and give them a glimpse of your project. More importantly, it needs to show donors that there are real people behind this project that really care about it’s success.
Production value is important but not essential. Just remember to keep it short (under 2 minutes) and include a call to action. Make it clear that you want them to get involved in your project and donate. Ask for the donation.
6. Reward Your Donors
Through this guide on the steps to create a successful crowdfunding campaign, the verb donate has been used many times. Don’t let this confuse you about the motivations of your supporters. They are really pre-purchasing your product or project outcome. Some may wish to donate without an expectation of return, but everyone else wants something from you.
Simply put you must create value for your supporters.
Value comes in many forms. It can be multiple copies of your project at a discounted rate. An exclusive look behind the scenes. A limited edition copy of your project. The sky’s the limit.
But you should objectively ask yourself if you would be happy if you paid $20, $200, or $2,000 to support your project. Better yet, ask a friend or complete stranger. If the value isn’t obvious, rethink your rewards.
7. Expand Your Reach
When you crafted your pitch the target audience should have been at the top of your mind. It should have spoken to their most basic wants or desires. Now where do you find these people?
Gaining momentum with a crowdfunding campaign means actively reaching out to those that are interested in your project. These people might already be in your social network. Most are not. To reach a wider audience may require you to connect with people in your community, contribute to your local newspaper, guest post on popular blogs, provide radio and TV interviews, or even advertise. This is just the tip of the iceberg. Get creative.
Expanding your reach is about more than just updating your facebook status, tweeting or spamming your friends. This is actually opposite of what you plan to do. In the process of building awareness of your project you should also be building an audience. A group of people that will not only support this project but also your next projects.
Engaging your audience is a difficult task. In fact, this is a problem that most professional marketers struggle with on every project. Even if you don’t know a single thing about marketing, the most important element to consider is that you must remain authentic. Authenticity always wins.
This guide was meant to offer an overview of the steps needed to create a successful crowdfunding campaign. It should be clear that each of these steps could be explained in an entire book. Actually, there are many books already published about the crowdfunding process. But instead of reading more blog posts and articles about crowdfunding, it’s time to get started.
What project are you dying to create? Now get started!